Barclays increases lending facilities

BARCLAYS Bank of Zimbabwe has increased lending to industry since the beginning of the year as it continues to grow its loan book, a top bank official said.

Clive Mphambela

Presenting the bank’s trading update for the year-to-date period at the company’s annual general meeting held in Harare on Wednesday, Barclays CEO George Guvamatanga said the bank had continued to evolve its products in line with economic developments and responding to customer needs.

“Benefits are already being realised, including from new product initiatives and structuring of loan and risk management products .This includes features of loan facilities,” Guvamatanga said.
“The loan book is growing but the loan loss ratio remains low at less than 1%.” .

The bank’s loans-to-deposit ratio increased from 40% at December 31 2012 to 44% as of the end of May.

The sectoral analysis of the bank’s total loan book saw the bank’s exposure to the light and heavy industries also growing to 37% from 33% as the bank grow its portfolio of loans to the manufacturing sector, while the contribution of consumer loans also rose marginaly from 14% to 15%.

However, the share of loans to the trade and service sectors reduced by 1% to 11%, while the share of its total loan book given to the transport and distribution sectors rose 2% to 25% and agriculture fell by the same margin to 12%.

Guvamatanga said the bank’s outlook was strong, with the run rate on interest income up 53% for the year-to-date to May as compared to the end of May 2012.

He said non-funded income growth of 4% was subdued reflecting constrained transactional growth and the effects of capped fees and charges.

Early this year, local banks signed a memorandum of agreement with the Reserve Bank of Zimbabwe, in which committed to reduce their charges for various agreed classes of accounts in a bid to promote financial inclusion.

The Barclays boss however reiterated that prudent lending would remain at the core of the bank’s strategy.